While you wouldn’t know it from the collective outrage visited upon us daily, between 2011 and 2013, total federal spending fell from $3.6 trillion to $3.45 trillion, but then as now, many predicted disasters that simply didn’t happen.
As is so often the case in our increasingly absurdist times, the conventional wisdom holds that all government spending is absolutely essential and every dollar allocated by Congress must be spent, lest the President commit some unspeakable crime against the country. Between these two assumptions, lies the notion that any cuts to government spending could subject the entire country, if not the world, to unheard of catastrophe even if very recent history strongly suggests otherwise. It was, after all, less than fifteen years ago when President Barack Obama enacted spending cuts larger than those being considered right now. While you certainly wouldn’t know it from the collective outrage visited upon us daily, between 2011 and 2013, total federal spending fell from $3.6 trillion to $3.45 trillion, an across the board cut of approximately 4.2%. In addition to declaring that the country couldn’t wait on Congress to reform the budget and the Chief Executive was empowered to review the budget line by line to reduce spending, President Obama negotiated a compromise bill with Republicans known as the “sequester” as part of an agreement to raise debt ceiling. The goal was to reduce federal outlays by approximately $1.1 trillion over an eight year period with cuts split equally by dollar across both defense and non defense spending, while excluding Social Security, Medicare, and other essential programs. As a result, non-defense spending was supposed to be cut between 5.5% and 7.8% with a planned total of $295 billion while defense would be reduced around 10%, saving $454 billion, with additional savings found in lowered interest payments on the debt. Not surprisingly, then as now, the idea of government cuts produced heart palpitations throughout the establishment. The Brookings Institute was typical of the artform, immediately declaring the sequester to be another man-made crisis, claiming “Our political system was not designed to be efficient, but it wasn’t supposed to be self-destructive, either. After a near-default on the public debt and a fiscal cliff that threatened a new recession, we are facing another man-made crisis: the sequester, across-the-board cuts in discretionary domestic and defense spending that are set to begin Friday and extend over a decade.”
At the time, Brookings identified five “myths” about the sequester, many of which have been recycled and represented today as new concerns. After making it clear that President Obama wasn’t personally to blame for the cuts in the first place, they proceeded to rather bizarrely complain that reducing spending would have no impact on the deficit or the debt anyway, and would perhaps even increase it. Before they tangled themselves in that fiscal not, they began by insisting cuts weren’t necessary in the first place because the elevated levels of spending where temporary. The $787 billion stimulus signed shortly after President Obama came into office was a “one time expenditure,” and “current law not including the sequester, non-defense discretionary spending as a share of the economy will shrink to a level not seen in 50 years. Defense spending grew substantially over the past decade, but that pattern has slowed and will soon end. Additional reductions must be achieved intelligently, tied to legitimate national security needs.” This was, of course, completely false. As we have seen since, when President Biden locked in spending levels after the pandemic, refusing to let a crisis go to waste, President Obama did the same as a result of the Great Recession. The government spent $2.98 trillion in 2008, before he was in office, but by 2011, spending was up to $3.6 trillion, a 20% increase that would certainly have continued, keeping the spending from the stimulus, $3.52 trillion in 2009, roughly intact. From these shaky beginnings, Brookings pressed their strange claim that the sequester-mandated cuts might even increase the deficit, somehow. “Across-the-board cuts can have perverse effects on deficits; as services are cut, the fees users pay for those services are lost. For example, sequester-driven furloughs of air-traffic controllers will lead to the number of flights being reduced…Deeper discretionary-spending cuts are counterproductive; immediate cuts, as Europe has made recently, could lead to a recession and bigger deficits.” Besides, even if you believed cuts were necessary, these were too fast, way, way too fast for the Brookings Institute as well, causing untold destruction both in the short term and the long term. “It seems like 2.3 percent of savings can be found without inflicting harm. But that 2.3 percent is applied to only a small part of the budget. And seven months, not 12, remain in this fiscal year to make the cuts. With little discretion about trimming areas such as aviation and food safety, layoffs and furloughs will interrupt services vital to the economy and public health. As disruptive as the first year of the sequester would be, imagine what a decade of automatic cuts would produce.” Thus, the horror will only compound in their view, getting worse over time, even in ways we cannot see or detect, like dark matter or dark energy. “The damage will accumulate in less visible ways, as irrational reductions in public spending impede economic growth and job creation; reduce investments in education, infrastructure and scientific research; and further disrupt the routines of a modern democracy. The longer the sequester remains in place, the more harm is inflicted.” Whatever the case, the cuts themselves weren’t even about money anyway. Instead, for their final myth and continuing their use of psychological projection, Brookings declared that Republicans simply want to punish the government and people, exactly as they do now. “The insistence on deep discretionary-spending reductions while calling for even deeper tax cuts shows that the sequester is not about money but about taking a meat ax to government as we know it.”
Exactly as today, these and similar claims were accompanied by a broad-based insistence the entire economy would suffer as a result of cuts that were generally agreed to be quite small. The supposedly nonpartisan Congressional Budget Office insisted that GDP growth would be slowed by .6% in a single year along with a deficit of 750,000 full time jobs compared to before the sequester. Nobel Prize Winning economist Paul Krugman claimed the figure would be slightly lower, 700,000 lost jobs, while the International Monetary Fund insisted on .5% lost growth, as though all were reading from something of the same script. Federal Reserve Chair Ben Bernanke added his opinion to the mix, representing a slightly different point of view which held that any cuts should be pushed far into the future to protect the economy, which would of course mean no cuts at all, ever. “To address both the near- and longer-term [fiscal] issues,” he said, “the Congress and the Administration should consider replacing the sharp, front-loaded spending cuts required by the sequestration with policies that reduce the federal deficit more gradually in the near term but more substantially in the longer run. Such an approach could lessen the near-term fiscal headwinds facing the recovery while more effectively addressing the longer-term imbalances in the federal budget.” Shortly after the sequester went into effect, the Federal Open Market Committee insisted it was “restraining economy growth” and slowing the recovery, a refrain that would repeat until the sequester was strangled to death by some of its own authors. Simultaneously, others expressed more targeted concerns – cuts to government employees, research, and the like, all of which would have outsized impacts on everything and everything. The Information Technology and Innovation fund claimed the cuts to research alone would cost us a minimum of $200 billion if not $565 billion in GDP, right off the top, an unnecessary buzz cut of our collective future. Francis S. Collins, the would-be disgraced Director of the National Institutes of Health worried that we would lose an entire generation of scientists, as though the STEM field itself might simply disappear if the government spent a tad less money. “I worry desperately this means we will lose a generation of young scientists,” he mused. His predecessor openly claimed that entire state of scientific research itself was at risk. Meanwhile, the FBI insisted that crime and terrorism were about to surge, another scourge upon us all, “New intelligence investigations were not being opened. Criminal cases were being closed. Informants couldn’t be paid. And there was not enough funding for agents to put gas in their cars,” and of course, who could forget the children? Early Head Start and Head Start programs claimed that 57,000 children were left out of the program, presumably destroying their lives.
Of course, you will not be surprised to learn that the reality proved very different. In 2012, the economy grew faster than before the cuts, with growth accelerating from 1.56% to 2.29%. In 2013, it continued at 2.12%, still substantially higher than earlier, and it would rise even further to 2.52% in 2014 and 2.95% in 2015. Job growth continued as well, with more new jobs available and more people working than at any time since the Great Recession. In 2011, the economy added 1.6 million jobs, increasing to 1.84 million in 2012, 2.19 million in 2013, 3.1 million in 2014. Sadly, the improvement in these and other economic metrics despite predictions of the opposite didn’t prevent politicians, including those who either voted for the sequester or signed it into law, from immediately attempting to wriggle out of it, which we can certainly imagine happening today, indeed which we see happening today, though this time it is the courts attempting the unwinding. By 2014, the budget started to grow again, albeit slowly at first, increasing from $3.45 to $3.51 trillion, but the growth never stopped, rising to $3.69 trillion in 2015, $3.85 trillion in 2016, and beyond. As of May 2017, shortly after President Donald Trump took office for the first time, it was declared officially dead. Mark Hawkins, writing for The Government Affairs Institute at Georgetown University, phrased it this way. “Sequestration put into place by the Budget Control Act in 2011 (BCA) is still on the books. But Congress, with the acquiescence of the President, has found a way to make that point moot.” After noting that this was part of a slow, protracted end, where “budget deals in 2013 and 2015 both relieved part of the cuts by moving additional cuts (to just mandatory programs for the budget geeks reading this) beyond 2021,” Mr. Hawkins described how the 2017 budget completely decimated them. “The defense number for 2017 is $551 billion and the non-defense number is $519 billion. By law, anything spent by agencies above those thresholds would trigger an across the board spending cut — a sequester. So naturally, one would assume Congress appropriated the FY17 Omnibus to that level. Well, yes and no.” How did they blow past their own agreed upon cuts without changing the law, getting to a hard no on fiscal responsibility? Effectively, they declared an emergency, when there was none, unless you count spending too much in the first place, “If you look at the revised 302(b) allocation filed by the Senate Appropriations Committee on May 4th (S2747) you will see the numbers in the Omnibus were a bit above the statutory limit. The final non-defense number is $554 billion and the Defense number is $634 billion! These are not minor adjustments but fully $118 billion above what the law allows without the sequester kicking in. But all $118 billion is designated as an emergency by the Congress and also by the President, thereby sparing the government from the sequester.”
Based on this recent history, it seems clear to me that President Trump has learned these lessons, some of which were self-inflicted wounds during his first term to be certain, and is trying to avoid a repeat of planned cuts that ultimately turned into the continued growth of government, using President Obama’s We Can’t Wait philosophy to lower the baseline with the hopes of locking in savings while the Republicans still control Congress. Essentially, he wants to flip the script. Declare an emergency to enact the cuts, then use the cuts as the new baseline. If anything, our position is far worse now than it was then. President Obama attempted to maintain government spending intended for the Great Recession by keeping a constant level of $3.5 trillion per year, an increase of around 17% over President George W. Bush’s final year in office. President Joe Biden significantly upped the ante, setting the new baseline an incredible 41% higher than it was before the pandemic. To put this in perspective, we were debating spending in 2012 and 2013 that is barely half of what we are debating today, meaning the size of the government has effectively doubled in barely 10 years with catastrophic impacts on our deficit and debt. Some things, unfortunately, don’t change and so the same tired arguments which didn’t come true in the first place are now being reused, granted in the more hyperbolic manner that accompanies President Trump wherever he goes and whatever he says. They were wrong then, indeed so wrong that everyone appears to have forgotten the whole thing, and they will be wrong now. On a more general note, there is another obvious lesson beyond any President Trump may have learned: Though these people have never been right, at least not since President Calvin Coolidge embarked on what were considered savage cuts in the 1920s, they still expect to be listened to. They should not be, under any circumstances. They are the very emergency they’re always telling us to avoid.
Confessions of a Conservative Atheist 